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TMI Blog2011 (7) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Indian Companies Act having its registered office at Mumbai and is engaged in manufacturing motor vehicles/ motor chassis from its factory situate at Chinhat, Deva Road, Lucknow. The motor vehicles are taxable at single point, i.e., at the point of sale to consumer. During the assessment year 2005-06, certain stock was transferred by the revisionist-company to its branch office and consignment agents located outside the State of U.P. and as such, form F are required to be issued under section 6A of the Central Sales Tax Act. Forms F are obtained from respective branch offices/consignment agents and further forms C are obtained from the purchasers located outside the State of U.P. and the same were handed over to the assessing authority but admittedly beyond time as practically. It is very difficult for the branch offices/consignment agents/purchasers situated outside the State to obtain and furnish forms C and forms F within the time stipulated in rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957. Looking into this practical aspect, the Commissioner of Trade Tax vide circular No. 873, dated August 26, 2000 and circular dated November 25, 2009 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, by itself, does not tie the hands of the State Government from levying the turnover tax. Considering the fact that section 4A is a code by itself, the liability to pay turnover tax arises irrespective of whether the assessee is liable to pay any sales tax or not and that includes the goods suffering duties of additional excise. Thus all that the Central Act states is that, wherever the State collects tax under the local enactment, the benefit of additional excise levied would not enure to the benefit of the said State. The counter further states that the Government had issued the notification in exercise of its powers under section 19 of the Act. Given the fact that the State Legislature has the competence to grant exemption/reduction in the rate of tax in public interest subject to such restrictions and conditions, there is nothing illegal in the said Government Order giving exemption and concessional rate of tax on the total turnover limit, subject to the conditions specified therein. Quite apart, the additional excise duty is levied by the Central Government. The Pondicherry Government adminis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State is competent to levy turnover tax under section 4A of the Pondicherry General Sales Tax Act and to grant exemption under section 19 either absolutely or subject to terms and conditions and that section 9 specifies goods included in the Third Schedule exempted from payment of any tax under the Act, no exception could be taken to the notification issued by the Government. He also placed reliance on the decisions reported in [1998] 111 STC 420 (SC); [1998] 7 SCC 237 (Sun Oil Company (P) Ltd. v. State of West Bengal) and [2010] 11 SCC 1 (Union of India v. Madras Bar Association), that when the statute is clear in what it intends to levy, nothing can be read into the provisions of the Act. The learned Special Government Pleader also placed before this court, the decision of a learned single judge of this court in W.P.No. 15808 of 1999, dated October 8, 1999 (Lakshmi Agencies, Yanam, by its Managing Partner v. Union Territory of Pondicherry), wherein this court had an occasion to consider the notification in G.O. Ms. No. 21/99/F2, Finance dated March 30, 1999. This court rejected the plea on the ground that when the Act provides the levy of turnover tax and the exemption cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover is liable to tax, including the turnover of purchase or sale in the course of inter-State trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India." Section 3 is the charging provision relating to payment of general sales tax under the Act. Section 4A deals with levy of turnover tax. The notification with which we are concerned herein relates to exemption from payment of turnover tax. Section 4A of the Pondicherry General Sales Tax Act reads as follows: "4A. Levy of turnover tax.-(1) Notwithstanding anything contained in this Act or the Rules made thereunder, every dealer shall pay turnover tax at the rate of three per cent on the total turnover: Provided that no tax under this section shall be payable on that part of such turnover which relates to,- (a) sale or purchase of goods in the course of the inter-State trade or commerce; (b) sale or purchase of goods in the course of export out of the territory of India or sale or purchase in the course of import into the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready seen, "total turnover", as defined under section 2(r), means the aggregate turnover of a dealer in all goods, i.e., the amount for which goods are bought or sold, as given under the definition of "turnover" under section 2(s). In contrast to section 3, the charging section, which levies general sales tax on the taxable turnover, levy of turnover tax is on the total turnover of the dealer as computed in accordance with the definition of "total turnover" under the Act. Thus going by the said definition, irrespective of the liability to pay general sales tax, the chargeability under the provisions of section 4A arises on the entire total turnover irrespective of whether the turnover is liable to tax at all or not, under the general sales tax levy, i.e., every turnover which is comprised in the total turnover other than those specifically excluded falls for consideration under section 4A of the Pondicherry General Sales Tax Act. Section 9 is a specific provision which deals with the goods specified under the Third Schedule on which an exemption is granted. Thus in substance, the Third Schedule merely catalogues the goods which are exempted. Section 9, by itself, does not impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arettes within the ambit of turnover tax. The said argument rests on the premise that cigarettes attract the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, that when once there is an additional duty of excise leviable on the assessee, there cannot be a levy of turnover tax. We do not find any justification to accept the said contention. The proviso under the Second Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957, reads as follows: "2. Tobacco.-During the financial years commencing on the 1st day of April, 1984, there shall be paid to each of the States specified in column 1 of the Table below such percentage of the net proceeds of additional duties levied and collected during that financial year in respect of tobacco, after deducting therefrom a sum equal to 2.192 per cent of the said proceeds as being attributable to Union territories, as B is set out against it in column 2: Provided that if during that financial year there is levied and collected in any State a tax on the sale or purchase of tobacco by or under any law of that State, no sums shall be payable to that State under this paragraph in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , unless the Central Government, by order, otherwise directs. Thus the prohibition as regards goods suffering additional duty of excise operates on a totally different field, referable to the rights of the State to receive its share in the collection and it has no relevance at all to the State exercising its authority to tax sales or purchases under entry 54, List II of the Constitution. Even though the assessee pointed out that the Revenue had not given the details as to whether the Union Territory of Puducherry had or had not received its share under the additional duties of excise, yet, as rightly pointed out by the learned Special Government Pleader, the counter-affidavit, in paragraph 14, specifically states that the Pondicherry Administration is not getting any contribution from the additional duties of excise collected by the Central Government under the Act of 1957. In the light of the above, we do not find any ground to accept the plea of the petitioner herein on the challenge made to the notification. Consequently, we hold that the notification issued by the Pondicherry Administration is perfectly constitutional and there is no repugnancy between the Additional Duties of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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